Five Ways to Move from Strategic to Adaptive Philanthropy

Getting real results from philanthropy requires more than basic strategy; it requires a strategy that can adapt to unpredictable changes—an adaptive philanthropy.

The idea of adaptive philanthropy has resonated powerfully over the past few years, as philanthropists have wrestled with how to make their work strategic and data-driven while flexibly adapting to unpredictable events. In the fall of 2013, SSIR and Bridgespan presented Giving That Gets Results, a series of blogs, videos, and webinars on this theme that highlighted the work of 25 philanthropists and thought leaders. This month, SSIR published “Strategic Philanthropy for a Complex World,” reprising the notion.

The question now is, how do we move from theory to practice—from a traditional approach to strategy to an adaptive one?

Consider the point of departure: John is from the school of strategic philanthropy. As program director for climate change grants, he has a tight theory of change for his detailed three-year grant strategy and clear metrics for success related to each activity. But even as his board was voting to approve this new strategy, he heard rumblings of a new referendum at the state level that could diminish state funding to his grantees, dashing an important assumption that supported his strategy. When the referendum passed, he couldn’t react because he didn’t have the necessary 6 to 8 weeks to write up new proposals for the board—and, in any event, he had spent his funds for the year.

Now, consider the point of arrival: Maria considers herself an adaptive philanthropist. She cares about reducing poverty, and regularly reads new research linking various interventions to socio-economic gains. Learning and updating her theory of change with new information—such as the publication of new research, or an interaction with a grantee or beneficiary—is one of the most important things she does. Like John, she has a scorecard of progress, but it measures against higher-level outcome indicators rather than specific implementation activities. When a new funding proposal started floating around city hall, she used her flexible capital to help grantees pursue scenario analysis in case the new funding came to pass. Then she and her board agreed to increase one organization’s allocation to help support passage.

These examples illustrate how adaptive philanthropy relies more on decision trees and scenario analysis than on rigid multiyear plans that take years to evaluate and months to refresh. It's critical to note that this approach requires just as much analysis as traditional strategy, and maybe more, since the analysis is dynamic, not static. Adaptive philanthropists are highly oriented toward the external environment, keeping an eye on important sensitivities and assumptions rather than executing what they wrote months ago.

Funders can start to cross the bridge from John’s point of departure to Maria’s point of arrival by considering the following:

1. Adaptive philanthropists define what success looks like over the medium and long term, for whom, and over what timeframe. This includes taking stock of what they really care about, all of the assets at their disposal (expertise, relationships, voice), what their stakeholders say that they or their staff are really good at, and what they need to learn.
2. Adaptive philanthropy defines the strategy’s anchors (what shouldn’t change in changing times); it also defines clear but flexible boundaries within which investments can move to catch currents. It defines the criteria by which adaptive leaders will judge new opportunities that pop up and determine whether or not to seize them.
3. Adaptive leaders understand what the evidence says about what does and doesn’t work, what’s known and unknown. This includes gold-standard evaluation evidence, where available, as well as the voices of beneficiaries and others whose mindset and behaviors they are trying to influence, on an ongoing basis.
4. Adaptive philanthropists have a clear learning agenda and plan to experiment so that they can come down the learning curve as quickly as possible, especially in new areas. Such a plan defines the most important assumptions to test and external factors that might require course correction.
5. With clear boundaries and a goal informed by evidence, adaptive philanthropy does not assume a rigid, paint-by-numbers process to achieve that success. It requires increased comfort with risk and uncertainty. It requires rapid prototyping of ideas, with frequent feedback from important stakeholders (not once a year, but monthly), and offers philanthropists outside perspective on their thinking. It requires rapid decision-making, shorter cycle times on budgets and paperwork, capital that funders can allocate flexibly to emerging opportunities throughout the year.

Most philanthropists we know aspire to change the world—that’s why they love the job. But many are seeking appropriate behaviors and tools to do it. Adaptive strategy requires a shift in thinking and doing.  It requires understanding where to anchor, and what can and should change. What became clear over the course of the Giving That Gets Results series was the imperative to reimagine how we build strategies and communities in the social sector so that they are more adaptive to an ever-changing and uncertain landscape, and how—in collaboration with grantees—funders can successfully turn new theory into practice.

Read more stories by Susan Wolf Ditkoff.